New Report Helps State Legislators Better Understand P3s

Public-private partnerships (P3s) are increasingly becoming a recognized and tapped tool in the toolbox to fund infrastructure investments. While the early adopter states have many P3 ventures under their belts, others are still navigating the process of how to structure an effective P3. To help further the conversation, the National Conference of State Legislatures released P3 Infrastructure Delivery: Principles for State Legislatures during its annual conference on Monday in Boston.

P3s are not a one-size-fits-all model. This can make learning and executing a P3 project more challenging, as each one is unique. In addition to the unique aspects of each project, each state’s laws vary as well, ranging from no authorizing legislation to allowing for P3s in transportation and other sectors. To help state legislators better understand the range of options and flexibility in funding a project using a P3, the report details the range of the private role from the design-build to build-operate-transfer approaches.

NCSL also offers nine principles for state legislators when creating a P3. These were released as part of the P3 toolkit, and the new report takes them a step further by offering examples of how each principle has played out in a P3 in the U.S. The principles are:

PRINCIPLE 1: Be informed. State decision makers need access to fact-based information that supports sound decisions. NCSL has continuously sought to provide state legislators with fact-based, un-biased and relevant policy information on P3s.

PRINCIPLE 2: Separate the debates. Debates about the P3 approach should be distinct from issues such as tolling, taxes or specific deals.

PRINCIPLE 3: Consider the public interest for all stakeholders. State legislators will want to consider how to protect the public interest throughout the P3 process.

PRINCIPLE 4: Involve and educate stakeholders. Stakeholder involvement helps protect the public interest, gain support and mitigate political risk.

PRINCIPLE 5: Take a long-term perspective. State legislators will want to approach P3 decisions with the long-term impacts in mind.

PRINCIPLE 6: Let infrastructure needs drive P3 projects—not the other way around. P3s should be pursued to support a state’s infrastructure needs and public benefit, not just to raise revenue.

PRINCIPLE 7: Support comprehensive project analyses. Before pursuing a P3, it should be shown to be a better option than traditional project delivery.

PRINCIPLE 8: Be clear about the financial issues. States will want to carefully assess financial goals, an asset’s value and how to spend any proceeds.

PRINCIPLE 9: Set good ground rules for bidding and negotiations. Legislation should promote fairness, clarity and transparency in the procurement process.

These guidelines are helpful to legislators, who must quickly understand complex policy issues to make decisions.

Read the report to further explore the findings and lessons on how a public-private partnership can be a valuable and effective tool to fund infrastructure.

ASCE urges the 116th Congress to focus on prioritizing infrastructure upgrades and modernization to sustain our economy, public health, and safety. Contact your Member of Congress to urge them to draft and pass legislation that moves toward closing the $2 trillion investment gap.

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